Micronetics settles pre-merger shareholder suits
Micronetics Inc. on Monday signed a memorandum of understanding that tentatively settles three shareholder class action suits in an attempt to prevent them from affecting the company's $75 million merger to Mercury Computer Systems Inc.
The terms of the settlement — which would include agreeing to the existence of a class — won't be released until it is approved by various courts, but Hudson-based Micronetics released some new details about the merger with the larger Massachusetts-based Mercury.
The biggest change is that Mercury would no longer continue to employ Micronetics CEO David Robbins.The update also indicated that, at least at the negotiation stage, most Micronetics employees would keep their jobs after the merger.
Robbins, who earned $333,000 last fiscal year, declined comment.
The suits — filed separately in the Delaware Court of Chancery, Hillsborough County Superior Court, and U.S. District Court — all contended that Micronetics was selling itself short at $14.80 a share. They contended that the company was on the upswing and could climb back to pre-recession levels.
The plaintiffs apparently are giving up preventing the merger, but what they will get in exchange — beyond the certification of a class — isn't clear. The Micronetics release said that there is no assurance that the parties will reach a final agreement or that the agreement would be approved.
Micronetics did add some details to its merger proxy — the disclosure document sent to the shareholders before the Aug. 8 on the deal.
Among the information is possible good news for Micronetics' employees. Mercury's letter of intent to buy the company "expressed that Mercury anticipated continuing at-will employment for all or substantially all of Micronetics' current employees following consummation of the transaction" and the letter also said the company "would expect to provide equity-based compensation as an element of the overall compensation package for selected (but unidentified) employees in a manner and at levels consistent with Mercury's current practice for its own employees."
The update did not indicate whether these terms were in the final merger agreement.